All Forum Posts by: John Carbone

Quote from @Luke Carl:

No one is going to rent a 20k house for 2 nights. Lots to unpack here. 

I second this. Go out to Cosby in the smokies and look at all the 10-20k “houses” that were thrown together during Covid that are getting literally 0 bookings all summer here. It worked for two summers during Covid though. 

someone unloaded a “campground” with 6-7 sheds for 400k, new owners 0 bookings even at $50…another person developed 250 square foot tree houses can’t rent them, and trying to sell the “resort” on mls as we speak with multiple price reductions. Then there are all of the vintage campers, airstreams, glamp tents, yurts etc  that can’t rent out. Pretty remarkable really. Another one of these campgrounds are listed on mls now too with 0 bookings all summer. 

Quote from @Nathan W.:

The May data just posted and the GSMNP is currently on trend to have the second highest annual visitor count ever. 

https://irma.nps.gov/Stats/SSR...

That doesn't mean those visitors are staying in cabins though. It could just mean that more people are taking day trips or staying 2 nights vs 4. The vacation rental market is being affected, I'm just pointing out the data. 

Thanks for the data. I do look and track this. I have a hard time believing that there were 50 percent more visitors in may than in March. Hotels in may were empty, with offerings below $50 a night and March was the total opposite except for the first week. I also go to the park 3-4 times a week for a few hours, and in March it was unbearable with crowds. In may, it was a virtual ghost town. 

we need to get dollywood visits where we can see a much better representation of visitors (paid visitors) @Leslie Anne Morris  any luck on that?

Quote from @Bonny Drago:

Hi I am thinking of getting into the STR business . Have been reading Avery Carl's book recommended here . Saw a 2bd 2 bathroom condo in Maui , priced at 779K ocean front good views , however it is a leasehold which expires in 30 years it is an active STR currently Apparently the current owner only made 45K last year ! Wondering if leaseholds are good option? I don't think the cash flow would be high? Honestly looking for recommendations? Like what numbers should I be looking at that would make this a good deal ?

Thank you

 I would look for a more profitable location/property, and use your profits to vacation at this property. 

On 779k you would be needing 80-90k minimum, preferably 100k 

Quote from @JD Martin:

Quote from @John Carbone:

here is a view of the parkway in pigeon forge heading towards gatlinburg by the titanic on a summer day yesterday …..you could land a 747 out there in front of the titanic. There was more traffic on the roads in January.

I'm curious if there is anyone on the ground in 30a Florida panhandle to give a real time honest update of how that area is doing in terms of crowds right now. My belief is that this isn't isolated to just the smokies, but given the large market here, we are the bell-weather for the STR market. All of us cabin owners need to ensure we have a 2-3 year reserve to weather the storm. Hopefully it's just a blip and things turn around, but I'm not liking what I see. Perhaps Jerome powell is finally getting what he wanted (demand destruction)

 I have a house very close to Disney and it has been ridiculously slow. I asked my PM how her other properties look and she said all of them have slowed down significantly (we do our own booking through the 3 major sites and our own site). I'm not willing to lower my prices significantly so I expect I'm going to have to accept a lot of vacancy for the time being, unless things pick up soon. 

It’s good to hear some feedback on Disney area. Since I made this post, I spoke with a PM down in destin/pcb and they are seeing 30 percent decline in revenues. Also, I’m hearing from some sources at the casinos in Las Vegas that it’s pretty dead for this time of year, apart from foot traffic from conventions. 

It makes sense it’s happening in the tourist spots as opposed to just one location. It happened way too quickly. All of last year and this March was phenomenal and ever since around Easter is when it became noticeable both in terms of occupancy and future bookings. 

there is a lot of concern around here that the market is saturated with rentals in the smokies, but I think this is showing we are finally seeing a slow down across the whole economy. 

Traffic this weekend has picked up a little, but it was may more crowded everywhere during March spring break weeks than it is now. 

It’s pretty crazy how almost on que, we start seeing it in the economy almost exactly 12 months since the fed began the rate hikes. 

Perhaps this works is specific locations, but someone here in the smoky mountains built 3 treehouses, ,and for the most part they did a really good job on it.....result has been a disaster. I have checked their calendars for the last year and their occupancy is literally below 20%. As a result, they have tried to sell the property, after 3 months no bids, just last week they lowered their asking price by 25%. Their whole summer is empty with no bookings even at only $100 asking price and still nothing. Just something to think about. 

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @Dustin James:

Need a bit of help as I'm approaching decision paralysis - I'm looking for recommended cities to invest in for STR. Trick is im planning to manage everything remote and/or use a management company. I was looking in Scottsdale, AZ because my brother lives there and can help just in case - but I know Scottsdale is very saturated and highly competitive - so I'm now looking into other locations too. Can anyone recommend other regions / cities that are hot / up and coming? (Would also consider international too)1

Pre-approved at 700k and ready to purchase any time. Not looking for anything with HOA. Willing to do a renovation if needed.

Any input is greatly appreciated as I am a first home buyer and want to start off on the right foot. 🙃

 I agree with Jossalyn. Can easily hit 10-15% gross of purchase price with tons of appreciation. We have a personal portfolio that has seen a return of 450% in 16 months by investing on the emerald coast. 

 Would you mind sharing a deal that was purchased with an 8 percent mortgage, and it earning at these clips?

149 Damon Circle Panama City Beach

Financed 25% down commercial loan at 7.86% interest

Renovation time: 5.5 weeks

Purchase price: $250,000

Cost to buy with fees and downpayment: 67,200

Renovation cost: $40,000

Furnishings: $7,000

After Repair Value: $350,000-$375,000

Grossing 50-55k a year. Feel free to connect about more deals. I bought a few deals 1st quarter of 2023 and looking to acquire 3 more! 

 im not very familiar with PCB, but airdna quotes a 40k revenue (including cleaning fees), with ADR of $217 and 51% occupancy. A quick look at airbnb for the summer months here in that community and you can get these units for sub $200, which is peak season. I imagine in the off-season due to the supply of these places they can be rented for below $100 if at all. I know it was just purchased and im sure you have some comps for 50k-55k (possibly during covid), but this seems far from a sure range. operating costs seem to be around $2500-$2800 month assuming self management. nobody is going bankrupt doing this, but im a bit skeptical on this holding up personally. 

 My monthly payment is 1569 a month for principal and interest at 7.86%

It's a commercial loan therefore taxes and insurance are paid separately. Since this is short term flip they will be prorated at closing and I only did a 6 month policy for insurance.

Hoa is 958 a quarter which includes the following: Accounting, Conference Center, Exercise Room, Gated Community, Ground Keeping, Internet-WiFi, Management, Mini Golf, Pest Control, Playground, Pool, Tennis, TV Cable

Complex includes: 11 pools(5 heated), shuffleboards, beach house/café, mini golf, exercise room, tennis courts, playground, WIFI, cable, pest control, termite bond, trash, ground keeping, property patrol, gated community etc

cost to own:

Power $125/month
Water $80/month
Gas $40/month
short term rental Insurance $4000/year
Current taxes $1776

Over head is $2615 a month. Insurance has already been paid upfront for the 6 months. But I did divide 4000 by 12 and 1776 divided by 12 and included it in the total cost to own monthly payment

I disagree with your analysis of $40,000 because some units are already reaching those numbers this year and they aren't as renovated as ours. We replace everything and designed it to sleep 8 people comfortably. I've sold several and personally bought a few. 

You need to hire a manager or self manage it and know how to promote it based on local events that gets you big premiums. We went with a niche based rental company that has been achieving these numbers on several units. The big firms are pulling standard data and promoting average results since they are just trying to reach certain targets. 

Thanks for the transparency, seems like a great community with good amenities. The “analysis” was just done by airdna and a spot check of that community based on current available units this summer. There will definitely be diamonds in the rough in this market. I don’t see any downside to waiting though. I will start paying attention more to PCB though. 

Sounds good. It’s all about risk management! We have positioned half of our cash reserve into the market. So far we are up 35-40% on our equity position since purchase. That way we don’t miss out and if something else occurs we still have capital to continue to buy.  

Out of curiosity how does the risk management play into the equation if rental numbers match the airdna projections across the portfolio? 

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @Dustin James:

Need a bit of help as I'm approaching decision paralysis - I'm looking for recommended cities to invest in for STR. Trick is im planning to manage everything remote and/or use a management company. I was looking in Scottsdale, AZ because my brother lives there and can help just in case - but I know Scottsdale is very saturated and highly competitive - so I'm now looking into other locations too. Can anyone recommend other regions / cities that are hot / up and coming? (Would also consider international too)1

Pre-approved at 700k and ready to purchase any time. Not looking for anything with HOA. Willing to do a renovation if needed.

Any input is greatly appreciated as I am a first home buyer and want to start off on the right foot. 🙃

 I agree with Jossalyn. Can easily hit 10-15% gross of purchase price with tons of appreciation. We have a personal portfolio that has seen a return of 450% in 16 months by investing on the emerald coast. 

 Would you mind sharing a deal that was purchased with an 8 percent mortgage, and it earning at these clips?

149 Damon Circle Panama City Beach

Financed 25% down commercial loan at 7.86% interest

Renovation time: 5.5 weeks

Purchase price: $250,000

Cost to buy with fees and downpayment: 67,200

Renovation cost: $40,000

Furnishings: $7,000

After Repair Value: $350,000-$375,000

Grossing 50-55k a year. Feel free to connect about more deals. I bought a few deals 1st quarter of 2023 and looking to acquire 3 more! 

 im not very familiar with PCB, but airdna quotes a 40k revenue (including cleaning fees), with ADR of $217 and 51% occupancy. A quick look at airbnb for the summer months here in that community and you can get these units for sub $200, which is peak season. I imagine in the off-season due to the supply of these places they can be rented for below $100 if at all. I know it was just purchased and im sure you have some comps for 50k-55k (possibly during covid), but this seems far from a sure range. operating costs seem to be around $2500-$2800 month assuming self management. nobody is going bankrupt doing this, but im a bit skeptical on this holding up personally. 

 My monthly payment is 1569 a month for principal and interest at 7.86%

It's a commercial loan therefore taxes and insurance are paid separately. Since this is short term flip they will be prorated at closing and I only did a 6 month policy for insurance.

Hoa is 958 a quarter which includes the following: Accounting, Conference Center, Exercise Room, Gated Community, Ground Keeping, Internet-WiFi, Management, Mini Golf, Pest Control, Playground, Pool, Tennis, TV Cable

Complex includes: 11 pools(5 heated), shuffleboards, beach house/café, mini golf, exercise room, tennis courts, playground, WIFI, cable, pest control, termite bond, trash, ground keeping, property patrol, gated community etc

cost to own:

Power $125/month
Water $80/month
Gas $40/month
short term rental Insurance $4000/year
Current taxes $1776

Over head is $2615 a month. Insurance has already been paid upfront for the 6 months. But I did divide 4000 by 12 and 1776 divided by 12 and included it in the total cost to own monthly payment

I disagree with your analysis of $40,000 because some units are already reaching those numbers this year and they aren't as renovated as ours. We replace everything and designed it to sleep 8 people comfortably. I've sold several and personally bought a few. 

You need to hire a manager or self manage it and know how to promote it based on local events that gets you big premiums. We went with a niche based rental company that has been achieving these numbers on several units. The big firms are pulling standard data and promoting average results since they are just trying to reach certain targets. 

Thanks for the transparency, seems like a great community with good amenities. The “analysis” was just done by airdna and a spot check of that community based on current available units this summer. There will definitely be diamonds in the rough in this market. I don’t see any downside to waiting though. I will start paying attention more to PCB though. 

Quote from @Ricardo Hidalgo:

Quote from @John Carbone:

Quote from @Ricardo Hidalgo:

Quote from @Dustin James:

Need a bit of help as I'm approaching decision paralysis - I'm looking for recommended cities to invest in for STR. Trick is im planning to manage everything remote and/or use a management company. I was looking in Scottsdale, AZ because my brother lives there and can help just in case - but I know Scottsdale is very saturated and highly competitive - so I'm now looking into other locations too. Can anyone recommend other regions / cities that are hot / up and coming? (Would also consider international too)1

Pre-approved at 700k and ready to purchase any time. Not looking for anything with HOA. Willing to do a renovation if needed.

Any input is greatly appreciated as I am a first home buyer and want to start off on the right foot. 🙃

 I agree with Jossalyn. Can easily hit 10-15% gross of purchase price with tons of appreciation. We have a personal portfolio that has seen a return of 450% in 16 months by investing on the emerald coast. 

 Would you mind sharing a deal that was purchased with an 8 percent mortgage, and it earning at these clips?

149 Damon Circle Panama City Beach

Financed 25% down commercial loan at 7.86% interest

Renovation time: 5.5 weeks

Purchase price: $250,000

Cost to buy with fees and downpayment: 67,200

Renovation cost: $40,000

Furnishings: $7,000

After Repair Value: $350,000-$375,000

Grossing 50-55k a year. Feel free to connect about more deals. I bought a few deals 1st quarter of 2023 and looking to acquire 3 more! 

 im not very familiar with PCB, but airdna quotes a 40k revenue (including cleaning fees), with ADR of $217 and 51% occupancy. A quick look at airbnb for the summer months here in that community and you can get these units for sub $200, which is peak season. I imagine in the off-season due to the supply of these places they can be rented for below $100 if at all. I know it was just purchased and im sure you have some comps for 50k-55k (possibly during covid), but this seems far from a sure range. operating costs seem to be around $2500-$2800 month assuming self management. nobody is going bankrupt doing this, but im a bit skeptical on this holding up personally. 

Quote from @Ricardo Hidalgo:

Quote from @Dustin James:

Need a bit of help as I'm approaching decision paralysis - I'm looking for recommended cities to invest in for STR. Trick is im planning to manage everything remote and/or use a management company. I was looking in Scottsdale, AZ because my brother lives there and can help just in case - but I know Scottsdale is very saturated and highly competitive - so I'm now looking into other locations too. Can anyone recommend other regions / cities that are hot / up and coming? (Would also consider international too)1

Pre-approved at 700k and ready to purchase any time. Not looking for anything with HOA. Willing to do a renovation if needed.

Any input is greatly appreciated as I am a first home buyer and want to start off on the right foot. 🙃

 I agree with Jossalyn. Can easily hit 10-15% gross of purchase price with tons of appreciation. We have a personal portfolio that has seen a return of 450% in 16 months by investing on the emerald coast. 

 Would you mind sharing a deal that was purchased with an 8 percent mortgage, and it earning at these clips?

Quote from @Carolyn Fuller:

Quote from @Michael Baum:

I am not surprised. It is too bad really. CA has such a varied pool of places to do and things to do, you could go there 10 times and never do the same thing.

I hope @Carolyn Fuller is correct that it might not be a big deal. People want to go to CA and they just might pay to stay and play.

 It certainly won't impact my trips to California nor my preference to stay in STRs.

Yeah, it’s the operator who will take the hit with lower revenue. Have that tax high enough and it will force them to stop altogether. If I’m in California I use hotel points anyway. I’m sure this increase in tax will solve the homeless problem. Perhaps they will need to increase to 30 percent.